- Accelerated Gross Profit Growth: Q2 gross profit rose 14% YoY to $2.5B, with Cash App's growth reaccelerating to 16% YoY, driven by Cash App Card and BNPL (Buy Now, Pay Later).
- Strong Adjusted Operating Income Expansion: Adjusted operating income surged 38% YoY to $550M, reflecting a 22% margin, with full-year guidance raised to $2.03B (20% margin).
- Borrow Product Milestone: Borrow reached 6 million monthly actives, contributing 20%+ annualized net margins, with origination volumes doubling to $18B in Q2.
- International and Banking Growth: International GPV grew 25% YoY, while banking actives hit 8 million (up 16% YoY), generating $250+ annualized gross profit per active (3x blended ARPU).
- Product Innovation and Sales Momentum: New products like Square Handheld and Tap to Pay drove 20%+ growth in new sales volume, with LTV/CAC ratios and 5–6 quarter paybacks supporting sales team expansion.
Strong Guidance and Product Momentum
The company raised its full-year guidance, expecting gross profit of $10.17 billion, up 14% year-over-year, and adjusted operating income of $2.03 billion, with a margin of 20%. The guidance implies continued acceleration in gross profit growth in the second half of the year. Jack Dorsey expressed confidence in the company's ability to ship products faster, citing the recent Pools launch as an example. Amrita Ahuja added that the company saw healthy signs in the second quarter that gave it conviction to raise its guidance, including the strength of Borrow and post-purchase BNPL on Cash App Card.
Product and Business Segment Performance
The company's strategy is focused on driving strength in four pillars of its business: a scaled peer-to-peer network, broad commerce capabilities, banking solutions, and enabling millions of actives to buy and sell Bitcoin. The company believes its unique combination of assets positions it for attractive sustainable long-term growth. In particular, Borrow reached 6 million monthly actives, and the company plans to continue expanding eligibility and increasing limits in a responsible way.
Valuation Metrics
With a P/E Ratio of 17.38 and a P/B Ratio of 2.12, Block's valuation appears reasonable given its strong financial performance and growth prospects. The company's ROIC of 10.35% and ROE of 12.76% also indicate a strong return on investment. With a Free Cash Flow Yield of 2.65%, investors may find Block's shares attractive given its ability to generate cash and invest in growth initiatives.